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Analysing the Impact of the Spring 2024 Budget: Chancellor's Capital Gains Tax Announcement on the UK Housing Market


In the Spring 2024 Budget, the Chancellor of the Exchequer made a significant announcement regarding capital gains tax (CGT) reforms, aiming to align rates more closely with income tax rates. This blog aims to dissect the details of the Chancellor's proposal, explore its ramifications on various stakeholders within the housing market, and evaluate its potential impact on government revenue and political dynamics.

The Chancellor's Announcement:

At the heart of the Spring 2024 Budget lies the Chancellor's proposal to reduce the capital gains tax rate from 28% to 24% for residential property. This reform seeks to strike a balance between incentivizing investment and ensuring fairness in the tax system. Currently, capital gains tax rates stand at 10% for basic rate taxpayers and 20% for higher and additional rate taxpayers, with certain exemptions and allowances in place.

Impact on Transactions:

The Chancellor's announcement is expected to have a notable impact on property transactions across the UK. The reduction in capital gains tax rates may stimulate activity in the housing market, as sellers may be more inclined to realize gains from property sales with lower tax liabilities. This could lead to increased liquidity in the market, greater turnover of properties, and heightened competition among buyers.

Effect on First-Time Buyers:

For first-time buyers seeking to enter the property market, the Chancellor's announcement presents both challenges and opportunities. On one hand, increased competition from buyers spurred by the reduction in capital gains tax rates may intensify affordability pressures and limit housing supply, particularly in high-demand areas. On the other hand, improved market liquidity and reduced tax burdens for sellers could create more favourable conditions for first-time buyers to enter the market.

Impact on Landlords:

Landlords contemplating the sale of their rental properties may reassess their investment strategies in light of the proposed reduction in capital gains tax rates. The lower tax liabilities on property sales could incentivize some landlords to expedite their exit from the rental market, leading to an increase in properties listed for sale. This surge in supply may contribute to a more balanced market, offering opportunities for prospective buyers and renters alike.

Likely Effect on Revenue:

While the reduction in capital gains tax rates may lead to short-term revenue gains for the government, its long-term impact on revenue remains uncertain. Behavioral responses from taxpayers, such as timing of asset sales, portfolio reallocation, and tax planning strategies, could influence the overall revenue impact of the tax reform. Government policymakers will need to closely monitor these dynamics to assess the effectiveness of the proposed reforms in achieving revenue objectives.

Political Implications:

The Chancellor's capital gains tax announcement has significant political implications, particularly in the context of the Spring 2024 Budget and upcoming elections. Some view the tax reform as a strategic move by the Conservative government to stimulate economic activity, support homeownership, and appeal to voters. Others perceive it as a necessary measure to address tax inequalities and promote fairness in the tax system. The political discourse surrounding the tax reform is likely to shape public opinion and influence electoral outcomes in the months ahead.


The Chancellor's announcement regarding capital gains tax reforms in the Spring 2024 Budget has far-reaching implications for the UK housing market and broader economy. As stakeholders navigate these changes, it will be crucial to monitor market dynamics, assess the impact on transaction activity, affordability, and investment decisions, and adapt strategies accordingly. By staying informed and proactive, stakeholders can effectively navigate the evolving landscape of the UK housing market and seize opportunities for growth and prosperity.

Chancellor CGT 24%
Jeremy Hunt

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